HOW INVESTING IN PROPERTY CAN HELP YOU ESCAPE THE RAT RACE
“The trouble with the rat race is that even if you win, you’re still a rat.” Lily Tomlin
There is not a day that goes by that I don’t come across someone stuck in the relentless rat race, and my heart goes out to them. People work from morning to night, often in a career they don’t enjoy, only for money. Surely, there is more to life than that?
Still, I understand. With the rising costs of living, high unemployment rate, uncertain economic climate, etc. many people feel like they have to stay. However, it is possible to break free from this cycle and experience financial freedom. My question to you is, what are you doing to get out of the rat race? Or have you resigned to keep running in circles forever?
Read our article, How My First Property Made More Than My Year’s Salary.
What the experts say about escaping the rat race
According to Warren Buffet, we should never depend on a single income. His view is that we need to invest to create a second source of income. He also famously said, “If you don’t find a way to make money while you sleep, you will work until you die.” I don’t know about you, but I’d rather try the first way.
Robert Kiyosaki is another famous investor who says that the poor trade time for money, whereas the rich trade money for time. I’ve said this before, but I want to reiterate it: Time is the most precious commodity you will ever have. Therefore, you need to nurture it, as well as your health, more than anything else! You want to be able to own your time and work because you enjoy working, not because you have to or because you need a salary at the end of the month.
Creating a second source of income
If we want to succeed, we have to intentionally create and build pathways that can bring us secondary sources of income. Preferably these should be more passive because passive income is a key to financial freedom. But as I’m sure you know, this is not going to happen by itself, and it is not going to happen easily. You are going to have to be very intentional about it and build towards it every day.
Do a quick online search and you will find thousands (if not millions) of ways to create a secondary income, including selling services or products online, freelancing, affiliate marketing, etc. You can also invest in various asset classes like shares, cryptocurrencies, foreign exchange, and so on.
Investors often build a diversified portfolio by combining various asset classes based on their financial goals, risk tolerance, and investment horizon. Diversification not only helps spread risk but also reduces the impact of poor performance in any single asset class. While there are many different investment options, for me, property is by far the best asset class to create consistent and sustainable cash flow. It is also more passive in nature and can replace your primary source of income.
The power of property investment
Although one usually invests in property for the long term, you can benefit from your property portfolio in the short term. Most people are aware of rental income, but you benefit from capital growth as well! The capital growth can be accessed by selling the property, but even better, you can access it by refinancing. Now, combine that with using as little of your own money as possible, i.e., using the bank’s money, and you’ve got a lucrative way to get out of the rat race.
Read our article, The Key To Prosperity is in Property Investment.
One of the nicest things about consulting with clients about their property investments daily is seeing how more mature ladies and gents, who have been investing in property for some time, have created passive income for themselves. They don’t have to work anymore, and they can live off the proceeds from their rental income. If that’s not a win, I don’t know what is!
Their secret? They started young and they kept buying properties. They didn’t sell, and they made sure they protected the cash flow by either paying off the properties as quickly as they could or by having sufficient cash reserves to protect them in volatile, unpredictable times.
Three tips for your journey to financial freedom
- Manage risk effectively: Mitigate investment risks by making informed decisions and continually educating yourself.
- Manage your time: Effectively balance your responsibilities to maximise productivity and create more time for investments.
- Have a long-term vision: Understand that financial freedom is a marathon, remain patient, and stay committed to your goals.
The journey from rat to fat cat isn’t an overnight one. I started investing in property to create a secondary source of income, and that was my way to get out of the rat race. It happened slowly but surely, and I was very intentional. Today, I can proudly say I am no longer a rat, but well on my way to becoming a fat cat! Are you ready to do the same?
Watch our YouTube video, How To Get Out of the Rat Race.
Read the entire article in the August Edition of Real Estate Investor Magazine.